RBS 2011 Annual Report Download - page 148

146 RBS Group 2011
Risk management: Credit risk continued
Credit risk measurement*: Asset quality continued
2011 2010 2009
AQ10 credit risk assets by division AQ10
£m
%of divisional
credit risk assets
AQ10
£m
%of divisional
credit risk assets
AQ10
£m
%of divisional
credit risk assets
UK Retail 5,097 4.6 5,017 4.6 4,846 4.7
UK Corporate 5,469 5.3 5,130 4.8 5,604 5.1
Wealth 12 0.1 9 — 11 0.1
Global Transaction Services 275 0.8 349 1.0 242 0.7
Ulster Bank 6,305 16.7 4,348 10.7 2,741 6.5
US Retail & Commercial 646 1.1 599 1.2 506 1.0
Retail & Commercial 17,804 4.9 15,452 4.3 13,950 3.9
Global Banking & Markets 2,314 1.4 2,551 1.5 2,806 1.4
Core 20,118 3.4 18,003 3.2 16,756 3.0
Non-Core 25,020 27.0 25,005 19.9 22,666 14.3
45,138 6.6 43,008 6.2 39,422 5.5
AQ10 credit risk assets by sector 2011
£m
2010
£m
2009
£m
Personal 8,398 7,620 6,955
Property 25,558 23,672 20,145
Banks and financial institutions 1,934 1,981 1,928
Transport and storage 1,720 1,689 1,026
Other 7,528 8,046 9,368
45,138 43,008 39,422
Key points
xTrends in the asset quality of the Group’s credit risk exposures in
2011 reflected changes in the composition of the Core portfolio in
line with the re-balancing achieved through the Group’s sector
concentration framework, the run-off of Non-Core assets and
changes in the external environment. Significant deposits were
placed with central banks and this resulted in a large increase in the
Group’s exposures within the AQ1 band.
xOverall, the asset quality of the Group’s corporate exposure was
broadly maintained despite the difficult external conditions in the UK,
with moderate weakening of credit quality in the Core divisions.
xAnotable exception is Ulster Bank, where weakness in the Irish
property sector continued to impact portfolio trends and the stock of
defaulted assets in the Core book (AQ10) continued to grow. Refer
to the section on Ulster Bank on page 159 for more details.
xIn line with expectations, the percentage of defaulted assets in the
Non-Core division increased following the run-off and disposal of
performing assets. Weaknesses in the commercial real estate
market continued to be the main driver of defaulted assets within
Non-Core.
*unaudited
Business review Risk and balance sheet management continued